US Airways Keeps Tightening Its Belt

A day after it reached a deal with its unions for additional cost reductions, US Airways said Saturday that it aimed to save $1.8 billion as it reorganizes as a leaner operation.

In a filing with the bankruptcy court, the carrier said it aims to reduce annual costs by $1.8 billion and hopes to emerge from bankruptcy protection next March, according to Reuters. Previously the company had targeted $1.6 billion in savings and said it aimed for an early 2003 emergence.

The comments come a day after the company, which sought bankruptcy protection in August, reached a deal with unions representing its baggage handlers, mechanics and flight attendants for additional concessions that will lead to more cost cuts.

The cutbacks come as part of the company's effort to slash operating costs and secure a $900 federal loan guarantee. The government would assume a 10%stake in exchange for the credit backing that is necessary for US Airways to obtain $1 billion in private financing.

The revamping comes amid an intense shakeout in the airline sector, forced in part by the weak economy and the Sept. 11, 2001, terrorist attacks. Rival UAL, operator of United Airlines, has also filed for Chapter 11 protection.